While many parties said the draft rules preventing foreign dominance of telecom operators could hurt consumers and dent foreign investment, the telecom regulator's commissioner who drafted it said the rules would ensure business transparency.
"I'm a lawyer. I examined all aspects when drafting it. I'll not do anything against the law," said Sudharma Yoonaidharma, National Telecommunications Commission (NTC) commissioner.
He said the draft was in line with the Foreign Business Act and Telecom Business Act and would ensure that foreign investors had nothing to hide when doing telecom business in Thailand. It is also the last regulation the NTC has developed according to its duty under the telecom law.
"If you [a foreign shareholder] hold 49 per cent of shares, your voting right has to be in accordance with your shareholding. It should not be that you hold 49 per cent but your voting right happens to be equal to 99 per cent," he added.
But Vichai Bencharongkul, president of Telecom Association of Thailand, said the rules tainted the country's image in the eyes of foreign investors by imposing several strict controls on foreigners working in the Thai telecom industry.
Companies were eligible to hire capable foreign management, who were already required to follow the country's relevant laws, said Vichai, former co-chief executive of Total Access Communication (DTAC). He questioned why the NTC hated foreign investment and foreigners working in Thailand.
The draft defines foreign dominance as the use of nominees and foreign ownership that exceeds the level permissible by law. It also means the foreign shareholders or proxies have the authority to recruit and appoint top executives in the companies and can determine the investment policy.
It also covers the recruitment of foreigners connected with foreign shareholders to key policy-making posts. The rules will be applied to both 3G spectrum-licence holders and private telecom concession holders. The NTC will order them to remedy the situation if they are found to breach the rules.
The draft is expected to affect foreign-controlled local telecom operators with many foreigners in high-ranking posts. Norway's telecom giant Telenor is DTAC's strategic partner, while Singapore Telecom is Advanced Info Service's strategic partner.
TrueMove has no foreign partner but it is likely to seek one to help fund its 3G-service development.
Somkiat Tangkitvanit, vice president of Thailand Development Research Institute, said the draft should be scrapped as it was against the state policy of wooing foreign investment.
The rules could make it difficult for existing telecom operators with foreign strategic partners to do business, and discourage foreign telecom operators from joining the bid for 3G licences. If there were only a few 3G-service providers, there would be no market competition and that would hurt consumers eventually, he said.
Somkiat questioned if the draft was aimed at benefiting any particular telecom operator. The NTC started drafting the rules many years ago. Sudharma had earlier denied that the rules favoured TrueMove. He also said attempts were being made to delay progress in developing rules.
Sudharma said he was also chairman of the Asean Telecommunication Regulators' Council, so he knew the rules were not against the provisions of the Asean Framework Agreement on Services (AFAS), aimed at liberalising the service sector, including the telecom sector. The telecom business law caps foreign shareholdings in local telecom operators at 49 per cent.
The NTC will listen to opinions of telecom operators in regard to the draft on August 20.
NTC commissioner Natee Sukonrat said he believed the draft would be amended if many parties strongly opposed it.